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Real Estate
e-Newsletter
by Cynthia S. Radom
Award-winning Certified Seniors Specialist REALTOR® Specializing in Trust Sales
Since 1994
Coldwell Banker Realty - Beverly Hills CA
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NEWS & ISSUES for BABY BOOMERS to GOLDEN-AGERS |
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** Writer and Publisher since October 1999 **
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What are the reasons for staying in a family home that is too big, too old, too unsafe, too costly or simply just not needed? Often it is an emotional versus a practical decision. But home is wherever you are living at the time.
For most people, a home is their most valuable asset. A pot of gold for their heirs to inherit. But it’s not the home that increases in value, it’s the land. A house once used decreases in value (like a car) unless it is consistently updated over time, inside and outside. Most older homeowners defer routine maintenance and only fix or replace as needed. Consider the cash outlay that an aged property requires. Throwing money into an outdated structure is simply wasting cash. Look around your area, are Buyers remodeling or building new homes?
CA homeowners have the unique opportunity to trade the family home for an updated residence while transferring their ultra-low property tax to any replacement residence anywhere in CA. Newer, cheaper and safer homes, thanks to Proposition 19.
As a start, think about downsizing for future needs. Possibly a move closer to family where you can visit in-person or relocate out of the area with new work-at-home flexibility. No matter where, living in an updated home provides a safer and a lower cost option rather than throwing money into an old cash cow.
Take advantage of today’s market prices and liquidate decades of home equity gains. This booming real estate market won't last forever. Benefit with cash on-hand as needed and live in a newer, updated home for your safety and enjoyment. The heirs will still get an inheritance. Instead of a tear down, it may be a smaller, newer, more saleable home and/or investments left over from the sale of the ol' family residence.
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President's Circle
Thank you to my Sellers and Buyers for making 2021 another award-winning year for Realtor Radom. When you're ready to sell or buy, call 310-779-1715.
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A Residential Property Report (commonly known as the 9A) is one of many Seller disclosures required by law. However, this report is only applicable to property sold in the City of Los Angeles. As a pre-sale disclosure, this report is to be approved by the Buyer prior to removing contingencies. Normally ordered by the escrow company and payable at the close ($75), the report usually takes about three weeks to obtain. When there is a short escrow, the principals need to agree, in writing, to close the sale prior to receiving the report.
The three-part report includes:
Part 1
IV (A) - Zoning Classification and Parcel Information
IV (B) - Authorized Occupancy and Use
This section details the residential property zoning designation (use of land within a municipality), i.e. the number of allowable dwelling units and other information relative to the occupancy and construction of the property. And, will include any permits issued on the property.
Part 2
V (A) - Sewer Information
V (B) - Liens and Assessments
This section informs the Buyer of potential or pending special assessments to the property: i.e. plans for new sidewalks or sewers and various code requirements for transferring ownership.
Owner's Declaration
The Seller completes this section confirming if certain mandated retrofitting is complete. If not, the Buyer must then agree to take responsibility to comply after the close. These items include:
- Smoke detectors
- Water conservation retrofit
- Glass door impact glazing
- Seismic gas shut-off valve
- Security bar requirements for bedroom windows
(As a listing agent, I always order the 9A Report once the listing agreement is signed, since I prefer to submit all disclosures to a Buyer prior to a Counter Offer.)
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VEGAS Rentals!!
If you're looking for an entry-level investment property...I have ten single-family homes, currently leased, coming on the market for sale. If you're interested, call Cynthia... 310-779-1715
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Just when homeowners were settling down after reeling from the inheritance section of Prop 19, here comes another controversial blow. SB9 (Senate Bill 9) made law by the CA Governor, allows an additional one to four residential units to be built on most lots zoned for one single-family home. The purpose is to address CA's housing affordability crisis and to incentivize the development of mid-price homes, a missing segment of the housing market.
SB9 allows one lot split into two, each with its own assessor's parcel number, and sold separately. An allowable build includes an attached or unattached duplex plus an ADU (accessory dwelling unit) on each parcel. That totals four homes where previously only one was allowed. One of the two units on each lot can be rented as long as the owner occupies the other as a full-time residence. There are other stipulations, but in general this new SB9 law will change the make-up of the family neighbor-hood. It eliminates single-family zoning and how this plays out remains to be seen.
Prior to the pandemic there was an annual shortage of about 100,000 new home builds to meet ownership demand. During COVID, the shortage increased substantially, along with the increased focus to build low-income housing. Municipalities across the State are trying to create roadblocks to save homeowners from having a mini-compound developed next door. E-mail your thoughts to me about SB9, pro or con.
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211 Spalding
Beverly Hills most sought-after full-service condo residence can be your new home. Be the first to view my Penthouse listing with panoramic City views. Call Cynthia for more info: 310-779-1715.
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Leased Items
Sellers, if any household item or equipment is leased, i.e. solar panels, water softener, electric car charger, contact the vendor to discuss a possible transfer to the Buyer and what the assumption entails. When contracts are involved, it often takes time to resolve, so investigate early.
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The flu-era pandemic of 1918 resulted in several home design changes including the addition of the powder room providing a place to clean up before interacting with everyone in the house. Also, the use of subway tiles in bathrooms for ease of cleaning, and built-in closets to confine clothes away from people thereby eliminating dust-catching armories. Carpet and draperies were removed from bathrooms to reduce germs. The COVID pandemic is also making an impact on home design, and a collaborative effort with home builders and researchers created a future concept home. Every space in the house is designed to work harder and respond to the residents’ changing safety needs.
Designed for multi-generations or Millennials with a growing family, some of the trends in the COVID concept home include:
- Family bathroom: usually shared by children, will be larger and contain lower counters, a large separate tub and shower and a trough-style sink
- Multiple flexible space: a kitchen island with an attached dining table for homework space and kid-height shelving; a re-oriented kitchen facing the family room (keeping the open floorplan)
- Two offices: not located in any bedroom
- First-floor bedroom: a guest suite with private entrance doubling as a quarantine room
- Quiet space: a hideaway room for one to decompress, make calls, read, play music (Zoom Room)
- Family entrance: once called a mud room, doubles as the laundry room (re-desired on the first floor) with a powder room to sanitize before entering the home.
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Owners of the highly sought-after Belmont Village are bringing more luxury Senior residences to Westwood. The approved site is 10822 Wilshire located on the south side of the Boulevard next to The Californian, a luxury condo community.
The 12-story project includes: 53 independent dwelling units, 77 assisted-living guest rooms and 46 memory care residences. The ground floor will offer amenity spaces such as an indoor pool and a screening room. The top floor will include a dining room, lounge, great room, bistro, gym and outdoor terraces. Although not coming soon, projected completion is in the next five years. View the rendering.
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Tidbits of News!
- The Fed hikes interest rates: An upward blip of .25% (a 1/4 percentage point) is the first increase since 2018.
- ADU Add-on: Granny flat; in-law unit; off-spring home, a builder can add 5-10% more total sqft. by attaching an ADU.
- Will vs. Trust: A Will does not keep your property sale out of Probate, an expensive and lengthy process for heirs.
- Property insurance: Do not assume that insurance costs and availability will be the same as the Seller's policy. Investigate ASAP.
- Buyer's Offer: Consider paying for a portion of the Seller's closing costs for a leg-up in a multiple offer situation with the required lender's approval.
- 2021 High-end Estate Sales: A record year for the LA area that included 1,312 closed transactions for $5M+ sales, an 82% increase over 2020:
- 76% American Buyers
- 395 over $10M
- 101 over $20M
- 33 over $30M
- 21 over $40M
The highest Estate sale was in Malibu's Paradise Cove at a record-breaking high. The property was purchased in 2013 for $41M and sold to Billionaire venture capitalist, Marc Andreesen, for $177M. Will 2022 bring a record $200,000,000 sale? Stay tuned.
- Mortgage rate increase: The in-creases will not affect LA Buyers.
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In today's Seller’s real estate market, where purchase prices often exceed the asking price, the appraisal can make or break a sale. Every mortgage lender requires an independent property valuation to help determine the loan-to-value ratio for a loan amount. The issue arises when the property appraises for less than the offered price, creating a “gap” between the two values.
There are three options to resolve the issue:
1. The Seller can reduce the purchase price to the appraised value, or a portion thereof if the Buyer has cash for the balance
2. The Buyer pays the gap amount in cash if a price reduction is non-negotiable
3. The Buyer can cancel the deal
A Buyer who has extra cash to cover a gap tends to win in multiple offers. One way is to include an appraisal gap clause in the initial or counter offer, which states the Buyer will cover the gap in-full or in-part. For example:
- If the appraisal falls below the offer price the Buyer will pay up to (X dollars) above the appraised value.
The Buyer has pre-approved an additional amount which they can afford to pay.
If a gap still remains, the Seller can agree to reduce the purchase price. This is a win-win for all. If not, the Seller is obligated to disclose the appraisal discrepancy to future prospects.
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Mortgage Rate Review
As news permeates of the Fed increasing interest rates, let's remember from whence we came. Based on a $1 million loan here is an historical review of fixed mortgage rates and monthly payments:
1981: 16.63% @ $13,956/month
1990: 10.13% @ $9,000/month
2000: 8.05% @ $7.400/month
2008: 6.03% @ $6,000/month
2020: 3.70% @ $4,600/month
2022: 3.50% first interest rate blip increased monthly pays about $50.
Expectation is that rates for 2022 will average 3.6%; max 3.9%.
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An article on Yahoo! Finance is worth sharing. The headline: Am I Annoying My Realtor? 6 Things That are Irritating Your Agent.
While REALTORS® always have a choice which Buyers to work with, the presumed outcome is always a closed sale. And it is also the agent's responsibility to determine who and what is wasting their time.
That said, here are six headlines of "annoying" Buyer traits taken from an agent survey:
1. When You Ask to See Properties Without Being Pre-Approved
2. …Or Worse, Look at Real Estate Outside Your Budget
3. When You Schedule a Home Tour Six Times Without Making an Offer
4. When You Make a Low-ball Offer That’s Insulting
5. When You Negotiate Items That You Signed Off on Pre-Inspection
6. When You Work With More Than One Agent
Time is money to a REALTOR ®, so before everyone's time is wasted, know what is expected of a Buyer before searching for a property. Click the link to read the full article.
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1031 Tax Deferred Benefits
Too much equity in your home to pay Uncle Sam capital gains tax on the sale? Have apartment rentals (and tenants) become a pain to maintain?
A leading CA company, Peak 1031 Exchange, offers information, ideas and strategies utilizing the benefits of a 1031 tax-free exchange to manage investment properties as a long-term strategy.
Learn how to reinvest proceeds from a property sale and defer paying taxes.
Open the links and print or read at your convenience:
Call Steven: (949) 836-7604 for a discussion
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Respecting your privacy and confidentiality, names and e-mails will only be used for providing pertinent material from Cynthia S. Radom and will not be shared with any other organization.
©2022 Coldwell Banker Real Estate LLC. Coldwell Banker® is a registered trademark licensed to Coldwell Banker Real Estate LLC. An Equal Opportunity Company. Equal Housing Opportunity. Owned By a Subsidiary of NRT LLC. This is not intended as a solicitation if your property is already listed.
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